Budget 2016—Transparency is disinfectant Part 1

By Prof. R Vaidyanathan on 24th November 2015

Link: https://performancegurus.net/budget-2016-transparency-is-disinfectant-part-1/

It is customary for professors of Economics and Finance etc. to give advice for the budget exercise and it is also customary for Government to hear but not listen to their advice.

But as per our tradition we will perform our Karma irrespective of the reaction of the Finance Ministry.

The tax department is extremely economical in giving any data pertaining to domestic tax payers not just in terms of names but even aggregates.

Palaniappan Chidambaram, the Finance Minister in the United Progressive Alliance government, in his Budget speech in 2013 mentioned that 42,800 people are assessed to tax for income of more than Rs. 1 crore (Rs 10 million). This is out of 3.10 crore (31 million) assessees at that time. Understandably, there was a hue and cry since the numbers were perceived to be very small.  But no demands were made to tell how many are assessed to tax in different categories including say more than 10 crores (100 million).

India’s income tax (IT) department does not provide any statistics about the number of tax assesses, amount of tax paid, income ranges for different categories like individuals/Hindu Undivided Family/corporates etc.

 IT department used to publish data on the number of returns from several categories of services till the year 2000. The numbers used to speak volumes about the coverage and also about the nature of underlying collections. Such details are not published by the I-T department anymore.

Till the year 2000 the All India Income Tax Statistics used to provide detailed category-wise statistics. This publication has been discontinued. In other words, the finance ministry has become shy of providing details of the tax assessed. Anyhow, we will look at the year 2000 numbers. (See table 1 below).

It says that there were no salaried persons in the country with an income of more than Rs 1 crore, and, in all, there were around 250 people above the Rs 25-lakh annual income level. In the case of self-employed, the number is around 900, with none in the Rs 50 to 100-lakh category!

Table 1. Number of Returns, Individuals (Salaried & Non-Salaried Persons)–2000

Range of Income Rs Lakh Salaried Number of Returns Non-Salaried Number of Returns
25-50 103 672
50-100 155 NIL
100+ NIL 258

Source: All India Income Tax Statistics [AIITS]—Directorate of Income Tax—New Delhi—2001.

Looking at table 1, we feel that a relief fund should have been created for all our top film stars, cricket players, surgeons, lawyers, chartered accountants, architects, tax consultants and other self-employed persons. They all seem to be in distress.

Table 2, below, has the information available from I-T department about tax assesses in India for different categories. It reveals that there were 3.1 crore assesses in 2010-11 but it does not tell us about the amount of taxes from different categories. Instead of such detailed information, what is provided now is the aggregated numbers — that also if some Member of Parliament decides to ask.

Table 2. Category-wise Number of Income Tax Assessees in India
(2008-09 to 2010-11)

Year Company Individual HUF Firms Trusts Others Total
2008-09 327674 30101260 768845 1310849 71145 70854 32650627
2009-10 367884 31384084 806236 1354330 76898 95994 34085426
2010-11 496872 31035394 761911 1229722 119378 95487 33739124

Source: Indiastat.com, Lok Sabha Unstarred Question no. 2062, dated on 02.12.2011

Most of the data available is for 2002/2003 and we claim we are a digital IndiaJ

It may be worthwhile for our finance ministry to check the web site of income tax Authorities of some of the G7 countries. They provide copious details and significant amount of insights.

The Web site of our IT Department gives circulars and forms and no information about the tax statistics –category wise and no worthwhile analysis. It is unfortunate that IT department has wealth of information but very frugal in sharing it with the public.

Similar to RBI, India’s I-T department too should bring out monthly bulletin as well as annual reports providing insights into the nature of our direct tax segments. Otherwise it will only be perceived as a corrupt and non-transparent government department.

In the context of computerisation of the I-T department, there is all the more reason they should revive the All India Income Tax Statistics and make it bigger and larger in terms of information dissemination. Ostrich-like attitude is not of much use in sharing of financial data since it will only increase distrust.

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One comment

  1. nparamasivam1951 · · Reply

    Sir, In India, Salaried are being punished by IT department. In this connection, it is worth to remember Dr.Swamy, who proved with statistics that Indian can abolish IT for 3 or 4 years. He proved that 92% of IT revenue was used for IT personnel only. By abolishing IT and utilising those personnel in fixing tax evaders and clearing black money holders, IT department benefits. Simultaneously, giving more incentives to public to Save will augment small savings.
    But, no one hears him. Not even tried on a trial basis.
    Like to have your views, Sir.

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